{"id":42889,"date":"2022-01-05T23:33:43","date_gmt":"2022-01-06T06:33:43","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/former-new-mexico-spaceport-cfo-alleges-fraud-retaliation\/"},"modified":"2022-01-06T06:33:43","modified_gmt":"2022-01-06T06:33:43","slug":"former-new-mexico-spaceport-cfo-alleges-fraud-retaliation","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/former-new-mexico-spaceport-cfo-alleges-fraud-retaliation\/","title":{"rendered":"Former New Mexico spaceport CFO alleges fraud, retaliation"},"content":{"rendered":"

\"Guests
Guests stand outside the Spaceport America hangar in 2011 in Upham, N.M. The former chief financial officer for the New Mexico Spaceport Authority has filed a whistleblower lawsuit, alleging that he was forced to resign after raising concerns about financial malfeasance. (Matt York\/Associated Press file)<\/span>Matt York<\/span><\/figcaption><\/figure>\n

ALBUQUERQUE \u2013 The former chief financial officer for the New Mexico Spaceport Authority filed a whistleblower lawsuit alleging that he was forced to resign after raising concerns about financial malfeasance that he said cost taxpayers millions of dollars.<\/p>\n

Among numerous allegations, Zach DeGregorio said in the lawsuit filed Dec. 28 that top officials committed securities fraud by refinancing spaceport gross receipts tax bonds under false pretenses.<\/p>\n

He also said secret meetings held between state officials and Spaceport America\u2019s most notable tenant \u2013 Virgin Galactic \u2013 may have resulted in violations of the state\u2019s anti-donation law, which restricts government donations to personal and private-sector enterprises as a precaution against graft and corruption.<\/p>\n

The civil complaint<\/a> filed in state district court lists numerous officials, including Gov. Michelle Lujan Grisham, Economic Development Secretary Alicia Keyes, officials with the New Mexico Finance Authority and members of the Spaceport Authority board.<\/p>\n

Nora Meyers Sackett, the governor\u2019s spokeswoman, said her office will not comment on pending litigation. Other officials did not immediately respond Wednesday to messages seeking comment about the allegations.<\/p>\n

DeGregorio, a certified public accountant who had worked for the spaceport authority for more than four years, posted a video statement<\/a> about his lawsuit on social media. He said he wanted to set the record straight.<\/p>\n

\u201cI believe one person can make a difference in this world and I believe it\u2019s important to stand up for what is right,\u201d he said.<\/p>\n

The lawsuit also details alleged procurement violations and retaliation that DeGregorio faced after first reporting his concerns to officials in 2020. DeGregorio asked for a jury trial for the lawsuit, which seeks back pay, lost future earnings and other financial damages, including punitive damages.<\/p>\n

DeGregorio\u2019s initial complaints triggered a 2020 investigation into allegations of financial mismanagement<\/a>, ethical violations and abuse of power by former spaceport director Dan Hicks, who was fired in 2021. Hicks has never commented publicly about the claims.<\/p>\n

New Mexico Attorney General Hector Balderas\u2019office said Wednesday that prosecutors have reviewed the financial oversight concerns raised during Hicks\u2019 tenure and directed the Spaceport Authority to strengthen its governance and oversight structures to ensure the appropriate use of taxpayer dollars.<\/p>\n

\u201cHowever, no conclusion has been reached on any related criminal matter at this time and we are still evaluating the new allegations contained in the complaint and will respond accordingly,\u201d the office said in an emailed statement to The Associated Press.<\/p>\n

DeGregorio also listed Balderas and State Auditor Brian Col\u00f3n as officials who were part of what he described as a cover-up involving problems at the spaceport. Col\u00f3n noted only the state of New Mexico was named as a party in the civil complaint.<\/p>\n

DeGregorio said the 2020 investigative report prepared for the state auditor\u2019s office was flawed.<\/p>\n

That report alleged DeGregorio assisted Hicks in circumventing procurement policies and evading internal controls. However, DeGregorio in his complaint said Hicks had repeatedly tried to get him to skirt the rules and that other spaceport employees were too scared to speak up.<\/p>\n

DeGregorio alleged that the procurement violations continued after he resigned.<\/p>\n

DeGregorio in the lawsuit accused Keyes \u2013 who also was appointed by Lujan Grisham as chairwoman of the spaceport authority board \u2013 of ordering him to alter a report that projected the spaceport\u2019s economic impact at almost $1 billion between 2016 and 2025. He said he refused and reported the matter to the governor\u2019s office.<\/p>\n

Sierra and Do\u00f1a Ana counties both enacted local taxes to help repay bonds that funded construction of Spaceport America, a desert outpost just north of Las Cruces that is designed to support a range of aerospace businesses \u2013 from commercial tourism ventures like those planned by Virgin Galactic to vertical rocket launches.<\/p>\n

DeGregorio accused state officials of using the Spaceport Authority to refinance the gross receipts tax bonds with the New Mexico Finance Authority under false pretenses.<\/p>\n

He said rather than refinancing in the public market, the bonds were refinanced at higher interest rates and under poor loan terms that included a requirement for a large reserve fund.<\/p>\n

DeGregorio alleges that Keyes was attempting to perform a sole source refinance directly with the New Mexico Finance Authority rather than putting the refinancing out to bid. If the bonds would have been refinanced in the public markets, he claimed that the Finance Authority would be required to give back millions of dollars in reserve money and would not receive any future spaceport tax revenues.<\/p>\n

According to the lawsuit, the Finance Authority collected the tax revenue from the two counties and repackaged it into low interest loans to provide to other projects in other locations around New Mexico.<\/p>\n","protected":false},"excerpt":{"rendered":"

stand outside the Spaceport America hangar in 2011 in Upham, N.M. The former chief financial officer for the New Mexico Spaceport Authority has filed a whistleblower lawsuit, alleging that he was forced to resign after raising concerns about financial malfeasance. (Matt York\/Associated Press file)Matt York ALBUQUERQUE \u2013 The former chief financial officer for the […]<\/p>\n","protected":false},"author":1,"featured_media":42890,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[815],"naviga_topic":[],"class_list":["post-42889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-associated-press-new-mexico"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/42889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=42889"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/42889\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/42890"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=42889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=42889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=42889"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=42889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}